Creating value through visualization VISUALIZE, PLAN, ACT! inners from all walks of life use visualization as a Wtechnique to achieve the goal they desire. It is about putting the imaginative mind to work and seeing the result (the picture of success) before you. The mind is a source of creativity, intuitive thoughts and feelings, inspiration and an able guide to help us achieve the goal we may desire. And this is possible if we have the ability to see the big picture - the picture of the desired result or goal - without our self-doubting or self-limiting thoughts and plant it like a seed in our mind. This ability to visualize the big picture without losing focus on the little things that build up towards it and then working relentlessly in achieving the desired outcome is an integral part of any successful organisation. For over three decades, we, at SBICAP, have been using the power of visualization to conceive, plan and execute our clients’ requirements. Our continued success in providing holistic and customer-focused solutions to complex problems in an ever changing market scenario, across business cycles and dynamics, is what separates us from our competition. This ability to see the big picture without losing sight of ground realities is an integral part of SBICAP’s organisational culture and client experience. Our credentials are a testimony to our execution skills and our continued success across market cycles, a tribute to the power of visualization! ANNUAL REPORT 2016 - 2017 1 All that is achieved is the result of what was first visualized ANNUAL REPORT 2016 - 2017 VISION To be the best India based Investment Bank. & MISSION To provide credible, INDEX professional and Board of Directors 05 customer-focused world-class Awards & Rankings 07 investment banking services. About Us 10 Financial Highlights & Market Standing 11 Project Advisory & Structured Finance Group (PA&SF) 14 Investment Banking Group (IBG) 16 Directors’ Report 17 Consolidated Financial Statements - Independent Auditors' Report 72 Consolidated Financial Statements - CAG Comments 77 Consolidated Balance Sheet 78 Consolidated Statement of Profit and Loss 79 Consolidated Cash Flow Statement 80 Notes to the Consolidated Financial Statements 82 Standalone Financial Statements - Independent Auditors' Report 113 Standalone Financial Statements - CAG Comments 120 Standalone Balance Sheet 121 Standalone Statement of Profit and Loss 122 Standalone Cash Flow Statement 123 Notes to the Standalone Financial Statements 125 When we're determined to think better, we're destined to live better 4 ANNUAL REPORT 2016 - 2017 OUR VISUALIZERS THE BOARD OF DIRECTORS Shri Dinesh Kumar Khara Smt. Bharati Rao Director Director Shri Narayan K. Seshadri Smt. Aruna Jayanthi Director Director Dr. Dharmendra Bhandari Shri Devinjit Singh Director Director Smt. Arundhati Bhattacharya Shri T. L. Palani Kumar Smt. Varsha Purandare Chairman Director Managing Director & CEO Shri Ashwani Bhatia Whole-Time Director 5 Manifesting reality with the power of visualization 6 ANNUAL REPORT 2016 - 2017 AWARDS & RANKINGS The Asset Triple A Asia Infrastructure Awards 2017 Renewable energy deal of the year – Wind, Chemical deal of the India, for Mytrah Energy Project Finance House year, India, for Chambal (India) 26.88 billion rupee of the Year, India Fertilisers and Chemicals debt refinancing and USD 710.91 million working capital facility financing facility Oil and gas deal of Power deal of the year, the year, India, for Petrochemical Deal of the India, for Thermal Bharat PetroResources Year, India - TCI Sanmar Powertech Corporation Limited USD Chemicals SAE USD 565 50.89 billion rupee 2.262 billion SBLC million facility refinancing financing facility Transport deal of the year for Jawaharlal Nehru Port Trust USD 400 million facility The Asset Triple A Regional Awards 2016 Awards for Best loan house, India & Best equity / Best IPO, India for RBL Bank’s 12.1 billion rupee IPO Dealogic No. 2 Financial Advisor Ranked No. 2 Mandated Lead No. 1 Asia Pacific Project Asia Pacific Project Finance Arranger in the Middle East & Finance All Financial Adviser Financial Adviser to Consortium African Project Finance Loans with market share of 18.6% Ranking 2016 - Market Ranking 2016 with market (Volume USD 9,690 million) share 19.1% (Volume share of 4.9% (Volume for CY 2016 USD 2,148 million) USD 9,466 million) 7 Bloomberg League Tables Ranked No. 1 - Indian Ranked No.1 - Local Borrower Loans Mandated currency loans Mandated Lead Arranger with 26.00% Lead Arranger with 39.14% market share (Volume INR (Volume INR 763,128 million) 553,436 million) for CY 2016 for CY 2016 Ranked No. 1 - Indian Borrower Foreign Currency Ranked 3rd in Private Loans Mandated Lead Placement of Bonds in FY 17 Arrangers with market share & No. 5 in Foreign Currency of 16% (USD 3,085 million) Bonds issue for CY 2016 for CY 2016 Thomson Reuters LPC / Basis Point Thomson Reuters - PFI ASIA PACIFIC 2016 Syndicated Loans Ranked 1st Asia Pacific No. 1 South Asia Project Finance Loans Mandated Arranger (market share 9.7% with market share of Volume USD 5,016.4 million) 10.70% (Volume - USD for CY 2016 2,471,907,576) Prime Database SBICAP was ranked 1st by number of equity issuances (16) and No. 3 by issue amount raised (~INR 19,924 crores) for FY 2017 8 Visualize & Achieve. The sum total of our existence. ANNUAL REPORT 2016 - 2017 9 Strategy is a thought. Execution is an art. ABOUT US BI Capital Markets Ltd. (SBICAP), India’s leading domestic Investment Bank, began its operations in SAugust 1986 and is a wholly owned subsidiary and investment banking arm of State Bank of India (SBI), the largest commercial bank in India. SBICAP offers the entire bouquet of investment banking and corporate advisory services. The service bouquet includes the full range of financial advisory services under one umbrella covering Project Advisory and Loan Syndication, Structured Debt Placement, Capital Markets, Mergers & Acquisitions, Private Equity and Stressed Assets Resolution. As a complete solutions provider to clients in investment banking and corporate advisory, SBICAP offers them advice, innovative ideas, and unparalleled execution across all stages in their business cycle ranging from venture capital advisory, project advisory, buy and sell-side advisory, accessing financial markets to raise capital and even restructuring advisory in their turn-around phases. SBICAP is a global leader in the area of Project Loan Syndication and has lent crucial support to the Indian infrastructure sector. SBICAP is known for its astute professionalism and business ethics. The team of executives consists of qualified and dedicated professionals with vast experience in the fields of Project Advisory, M&A Advisory, Corporate Strategy or Business Restructuring Advisory, arranging of Private Equity / Structured Finance, Equity, Debt and Hybrid Capital raising. Headquartered in Mumbai, SBICAP has 5 regional offices across India (Ahmedabad, Chennai, Hyderabad, Kolkata and New Delhi), 1 branch office in Pune and 5 subsidiaries - SBICAP Securities Limited, SBICAP Trustee Company Limited, SBICAP Ventures Limited, SBICAP (UK) Limited and SBICAP (Singapore) Limited. The regional offices are located strategically at major business hubs in the country and closely liaise with clients at those and nearby centers. SBICAP also offers services in the areas of Equity Broking & Research, Security Agency & Debenture Trusteeship and Private Equity Investment & Asset Management through its wholly-owned subsidiaries SBICAP Securities Limited, SBICAP Trustee Company Limited and SBICAP Ventures Limited, respectively. 10 ANNUAL REPORT 2016 - 2017 0 100 200 300 400 500 600 700 800 900 FY 13 549.77 FY 14 594.62 GROSS INCOME FY 15 715.13 (Rs. in crores) FY 16 683.90 FY 17 540.74 0 50 100 150 200 250 300 350 400 450 FY 13 296.00 FY 14 265.28 PROFIT AFTER TAX FY 15 338.00 (Rs. in crores) FY 16 283.39 FY 17 217.95 0 10 20 30 40 50 60 70 80 90 FY 13 51.00 FY 14 45.71 EARNINGS PER SHARE FY 15 58.24 (Rs. in crores) FY 16 48.83 FY 17 37.56 0 200 400 600 800 1000 1200 1400 1600 1800 2000 FY 13 878.10 FY 14 952.38 NET WORTH FY 15 989.54 (Rs. in crores) FY 16 1041.89 FY 17 1107.84 ANNUAL REPORT 2016 - 2017 11 Focus determines success MARKET STANDING ASIA PACIFIC PROJECT FINANCE ALL FINANCIAL ADVISER RANKING (Value in USD million; Market Share in %) (FY 2015) (FY 2016) Source: Dealogic Project Finance Review INDIAN BORROWER LOANS (BOOKRUNNER) (Value in INR million; Market Share in %) (FY 2015) (FY 2016) Source: Bloomberg - India League Table 2015 - 2016. 12 ANNUAL REPORT 2016 - 2017 PUBLIC ISSUE OF DEBT (Rs. in Crores) (FY 2016) (FY 2017) PRIVATE PLACEMENT OF DEBT (Rs. in Crores) (FY 2016) (FY 2017) ALL EQUITIES (Rs. in Lacs) (FY 2016) (FY 2017) Source: Prime Database ANNUAL REPORT 2016 - 2017 13 Strategy. Execution. Success. PROJECT ADVISORY & STRUCTURED FINANCE GROUP (PA&SF) BICAP is the market leader in providing financial advisory and Sdebt / equity syndication services to a large client base in various sectors with focus on Infrastructure sector and core industries. SBICAP's Project Advisory & Structured Finance (PA&SF) Group provides the best-in-class services and excellence in execution of the very complex transactions across the service space in order to help the clients grow and achieve their strategic business objectives. The Group has been the pioneer in advisory services in the country with a comprehensive range of offerings covering the entire life cycle of projects. Its wide knowledge base makes it the foremost choice of the corporates as well as the government bodies for availing advisory services in infrastructure and core industries. On the other hand, its strong relationship with banks and financial institutions - both domestic and overseas, make SBICAP the market leader and first port of call for Debt Syndication services for project finance as well as structured finance transactions.